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This UAE’s gas sector Some strange paradoxes have long been raised. Despite having the world’s ninth-largest reserves, the country is a net importer of natural gas.
It is one of only five exporting and importing countries liquified natural gas (liquefied natural gas) – other countries have far-flung territories and require tankers to transport gas between them.but Policy changes in recent years will help resolve these contradictions and bring the nation’s natural gas business into a new era.
Much of the UAE’s gas production is tied to oil production and is inflexible. Demand varies seasonally, while oil production could be reduced due to factors such as commitments under the OPEC+ deal.
until start Nuclear and solar energy in recent yearsthe country is almost entirely reliant on natural gas for power generation, and it is also a fuel and feedstock for industries such as petrochemicals.
Strong economic and population growth over the past two decades has resulted in surge in demandat least temporarily exceeding the quantity that can be produced domestically.
In July 2007, Dolphin Energy, in which Mubadala is majority-owned, started to transport natural gas from Qatar to the UAE via pipeline.
In 2010, Dubai began importing LNG through floating terminals. This, together with the conversion of the Margham gas field into an underground storage facility, provides flexibility to meet different needs. In 2016, Sharjah and Ras Al Khaimah signed up for a steady supply through Dolphin.
However, it has always been clear that there are risks and costs associated with relying on imports, as well as the opportunity to fully utilize the UAE’s own natural gas resources. The steps taken from 2008 took time to produce results, but are now taking effect in due time – and spanning four areas.
First, consume less gas and use it more efficiently. Electricity and water subsidies have been reduced and reformed, power plants have been upgraded with more efficient equipment, and desalination is turning to reverse osmosis, which consumes less energy and is more flexible than traditional thermal methods.
The second is power generation and gas supply. In 2008, the United Arab Emirates released a white paper on civil nuclear power. Barakah Nuclear Power Plant It started in July 2012. It started producing commercial electricity in April 2021, with a fourth, and currently, final reactor undergoing testing.
January 2012, Dubai Mohammed bin Rashid Al Maktoum Solar Park The Dubai Electricity and Water Authority (Dewa) is currently preparing its sixth phase, which will reach a final capacity of 5 GW by 2030 – about half of the emirate’s peak demand.
Abu Dhabi’s Ewec is building the world’s largest single-site solar farm in Al Dhafra with a capacity of 2 GW.
The third is to promote domestic natural gas production. In 2018, Energy and Infrastructure Minister Suhail Al Mazrouei said the country would be self-sufficient by 2030.
The Abu Dhabi National Oil Company (Adnoc) has launched a program to develop more challenging resources in partnership with international oil companies. Last year, it announced that its natural gas reserves had increased by 16 trillion cubic feet, or nearly 6 percent.
This includes the world’s largest sour gas offshore project, which contains corrosive and toxic hydrogen sulfide. The Ghasha field should boost national production by more than a quarter by the end of the century. A consortium of Italy’s Eni and Thailand’s PTTEP discovered gas offshore in February and drilled deeper into it last month.
In February 2020, Dubai announced a large unconventional gas discovery south of Jebel Ali, but its commercial status remains unclear.
Local exploration has resumed in Sharjah and Ras Al Khaimah, and the Sharjah National Oil Company has launched a gas storage project to balance seasonal demand.
The fourth is to make effective use of this new atmosphere. Due to higher efficiency, nuclear and solar power plants, the demand in the power sector is falling, which can lead to local industry and international markets.
Adnoc is building a new LNG export facility in Fujairah. The world needs more supplies as Europe and Asia collapse under the weight of unusually high gas prices and reduced Russian exports.
The Taziz Industrial Park in Ruwais is the heart of the new gas industry. Offered at a competitive but non-giveaway price, it will include, among other things, a “blue” ammonia plant – with carbon capture and storage – a world-class methanol plant, the first in the country to produce this basic A factory for fuels and basic chemicals, and a factory for plastic PVC.
The production of blue ammonia and hydrogen from the gas could be developed alongside green hydrogen made from renewable energy sources. In the long run, this could replace the polluting gas “grey” hydrogen used in refineries and fertilizer plants.
Continued success requires three elements. The first is to reduce the cost of production of these new, technologically more complex resources.
Now world LNG prices are very high and the market is very tight, but this is not always the case and additional exports from Qatar, Africa and the US will reach customers around the same time as Adnoc’s Fujairah facility around 2026-2027.
The second is to maintain the momentum of the new plant, as the UAE competes with Saudi Arabia’s already huge petrochemical industry and potentially post-sanctions Iran.
The third is to keep the production and use of new gas as low-carbon as possible, and continue to make progress in renewable energy. Long-term preparations for the gas situation in the UAE are bearing fruit. Now is the time to ensure its long-term sustainability.
Robin M Mills is CEO of Qamar Energy and author of The Myth of the Oil Crisis
Updated: August 29, 2022 3:30AM
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